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Home›Featured›Colleges Seek New Revenue Streams, As Students Push Back Over Tuition Increases

Colleges Seek New Revenue Streams, As Students Push Back Over Tuition Increases

By Matthew Lynch
December 19, 2018
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It’s been said that death and taxes are the only two guarantees in life, but there may be a third one: rising college tuition costs.

The rising cost of tuition has not exceeded annual inflation costs, but rates continue to rise. Colleges are being forced to seek new revenue streams, as students push back over tuition increases.

Universities are finding new sources of income from surprising and creative sources.

Generate more green with gardening

Universities seek unusual ways to supplement their endowments to stabilize tuition costs and prevent them from skyrocketing. That may mean franchising merchandise and finding other creative ways to generate more income.

Unity College in Maine, for example, sells produce from its greenhouses. They also sell gardening implements, outdoor decorations, and offer community workshops – for a fee.

Provide professional development services

Who better to turn to for corporate training than universities known for their outstanding executive education programs? Schools like Harvard University are marketing their services exclusively to multimillionaires, and other universities are finding local training opportunities of their own.

By offering professional development services that enhance and accelerate careers, colleges can generate new income streams.

Capitalize on what matters most to your fans

Fans take football and other athletic games seriously at some universities, and missing a game means missing out one the best plays. University of Texas-Austin fans will never have to miss another moment of important games because they can purchase an annual subscription that allows them to see the game, highlights, and press conferences.

The school launched a partnership with a cable company to provide the subscriptions, and the university collects revenue for each subscription.

Receptive to new ideas

University leaders are welcoming diverse opportunities that will help them secure new funding sources. Alternative sources of revenue may include:

  • Seniors’ marketing programs (weekend retreats, destination travel led by faculty members, retire communities)
  • Banking services (campus banks, loyalty programs, insurance and retirement programs)
  • Consulting and outsourcing services (education, nursing, technology, business, and marketing)

Also, universities are seeking ways to increase their brand by offering décor, license plates and designer labels on everything from clothing to wine.

Discount rates

 Universities are also hoping to lure bargain shoppers to their schools.

By offering discounted rates for tuition, universities have hoped to increase their enrollments. The idea is that more students will mean more revenue, even if these students aren’t paying full price for their degrees. In 2016-2017, discounted tuition rates reached 49.1%, the highest it’s ever been.

Generous financial aid packages may attract students, but will likely not be sustainable long-term.

Applying resets

Some colleges and universities have tried tuition resets, which is another way to discount the cost of a college education. They reset the price of tuition to what it had been several years ago, in the hopes that students will feel as though they are getting a good deal on tuition costs.

A reset gives an arbitrary picture of tuition costs. In reality, some students may be paying more for tuition after a reset because other students at the same school are given deep discounts that exceed the benefits of a reset. The actual cost of a degree at the same university can vary widely between students enrolled in the same program, leaving students who pay the reset price to pay a higher price in tuition.

Graduate school

Encouraging students to continue their studies may be one of the best revenue-generating strategies universities have in their financial war-chests. Tuition paid for graduate studies is filling the sinking coffers of undergraduate tuition costs. Online graduate degree programs, with their greater flexibility, are helping to generate revenue quickly.

Simmons College, for example, has doubled its tuition revenue as a result of increasing their graduate school programs and attracting more students to them.

Diversified income sources are becoming more common as nontraditional ways to generate revenue. As students continue to push back over tuition increases, universities will explore more strategies to keep their schools open.


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